China’s State Council on Monday made important instructions to promote high quality development of small and medium sized enterprises (SMEs), in an effort to create a better business environment, strengthen financial support, and provide more targeted fiscal and taxation policies to support SMEs.
But how can that be achieved? Wang Changlin, deputy director of the Macroeconomic Research Institute of the National Development and Reform Commission, and CCTV business commentator Liu Ge shared their views.
Private businesses to be treated equally with SOEs
According to Wang, private businesses play a crucial role in stabilizing employment and economic growth and have to be treated equally with state-owned enterprises (SOEs).
“SMEs are the source of China's economic growth, employment and industrial upgrading. SMEs contributed to about 60 percent to investment, and over 80 percent to urban employment. They are also the source of innovation,” Wang said.
Strengthen financial support to SMEs
In order to create a better environment for the development of SMEs, a key aspect is to strengthen financial support to them, according to both experts.
Although financial institutions have made continuous efforts to fund SMEs in the past years, many of them still face difficulties in financing. In the new stage of economic development, it is crucial to increase financial innovation to support them, they said.
IPR protection at the core
Intellectual Property protection is at the core to promote high quality development of SMEs, both experts said.
“SMEs must develop their own unique brands. And IPR protection is key to form core competitiveness for Chinese companies,” Wang noted.
Liu noted that special support must be offered to innovative SMEs. “In the US, there are specialized laws and institutional arrangements to support the development of high-tech companies, and some cutting-edge firms have been cultivated under such circumstances.”
